2021 was not an easy year for active investors. While the strong tailwind of recovery from the pandemic set an overall positive tone for risky assets, performance of various investment strategies was often thrown off by new COVID waves leading to market volatility, steepening/flattening of yield curves, and style rotations. At the beginning of the year, cyclical assets rallied in the aftermath of vaccine rollout and optimism that the pandemic would be over by the summertime. Brief periods of volatility driven by short squeezes in meme stocks and hedge fund liquidation did not disrupt the recovery and reflation trade. Yields reached the year’s high by the end of March (~1.75% for the 10Y US yield) and cyclical assets recovered nearly all pandemic losses (relative to defensive assets). However, when the delta variant appeared in India, the rotation stalled and started reversing later in the spring, with the variant emerging in the UK and eventually the US later in the summer. Yields went back to the lows and reflation and reopening trades were unwound completely. With COVID cases on a decline early-autumn, reflation, yields, cyclicals and commodities were ready to rally again, and they did – reaching March highs again in October. Shortly after, confusion about monetary policy liftoff (e.g. Bank of England) injected new volatility and pain into various active portfolios. Markets regained their footing, only to be put in another tailspin by the omicron variant scare that caused a spike in equity and bond volatility. Where does this leave us in December and how do we see 2022?